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Volkswagen brand boosts sales revenue and result

Volkswagen brand boosts sales revenue and result

Operating profit before special items rises by 4.8 percent to €921 million

Brand confirms operating return target of 4 to 5 percent for entire year

Board Member for Finance Dr. Arno Antlitz: “New SUV’s enrich our range of products. Focus on efficiency and cost discipline is bearing fruit. At the same time, the brand is investing strongly in future-oriented technologies.”

In the first quarter of the 2019 financial year, the Volkswagen Passenger Cars brand performed solidly in a challenging market environment. The lead brand of the Volkswagen Group was able to boost sales revenue and operating profit in the first three months despite a slight fall in deliveries. With an improved product mix, the sales revenue of the Volkswagen brand grew by 7.1 percent to €21.5 billion. After three months, the operating profit before special impacts was 4.8 percent up on the prior-year figure, at €921 million. Here too, Volkswagen benefited from an improved product mix, positive developments in product costs and especially an improvement in fixed costs. In the first quarter, the operating return on sales was at about the same level as in the previous year, at 4.3 percent. In the reporting period, legal risks gave rise to special items in the amount of €0.4 billion in connection with the processing of the diesel issue.

“The Volkswagen brand has made a good start to the new financial year. The figures for the first three months show that our consistent focus on improving efficiency and cost discipline within the company is the right approach and is bearing fruit. We must continue with the approach which we have adopted with a view to sustainably improving the earnings power of Volkswagen. At the same time, we are investing strongly in future-oriented technologies such as the MEB, the digitalization of our products and the implementation of our product offensive,” said Dr. Arno Antlitz Member of the Board of Management of the Volkswagen brand responsible for Finance.

In the first quarter, the brand was able to boost market shares. Nevertheless, deliveries fell by 4.5 percent to 1,456,400 vehicles as a result of the sluggish overall market. The Volkswagen brand is continuing its product offensive this year and is especially adding SUV models such as the new T-Cross to its portfolio. Demand for these model variants across the market segments continues to be strong in many regions.

In terms of fixed costs, the Volkswagen brand recorded in the first quarter of 2019 an improvement of about €200 million compared with the prior-year quarter. This improvement was chiefly due to the consistent implementation of the measures defined in the pact for the future (‘Zukunftspakt’). “During the remainder of the financial year, we will need to make further efforts to accommodate risks arising from the markets,” said Antlitz.

The Volkswagen brand is also working to improve the productivity of its plants globally. By 2025, the brand intends to boost the productivity of its plants by 30 percent. In addition to consistent investment discipline and plant deployment across the boundaries of brands and models, Volkswagen expects considerable efficiency effects for its plants in the future from the use of new technologies such as the Volkswagen Industrial Cloud.

In the first three months of 2019, net operating cash flow before cash outflow caused by the diesel issue amounted to about €0.6 billion.

Sales revenue and return targets confirmed

For the current financial year, the Volkswagen brand continues to expect an operating return on sales within the target corridor of 4 to 5 percent. Significant financial impact as a result of the second stage of the changeover to the WLTP test cycle is not expected in 2019.

The Board of Management of the Volkswagen brand has set an operating return on sales target of at least six percent by 2022 in order to provide the funds required for all future-oriented investments in e-mobility and digitalization from its own resources and to shape the transformation of the industry.

The specified fuel consumption and emission data have been determined according to the measurement procedures prescribed by law. Since 1st September 2017, certain new vehicles are already being type-approved according to the Worldwide Harmonized Light Vehicles Test Procedure (WLTP), a more realistic test procedure for measuring fuel consumption and CO2 emissions. Starting on September 1st 2018, the New European Driving Cycle (NEDC) will be replaced by the WLTP in stages. Owing to the more realistic test conditions, the fuel consumption and CO2 emissions measured according to the WLTP will, in many cases, be higher than those measured according to the NEDC. For further information on the differences between the WLTP and NEDC, please visit www.volkswagen.de/wltp.

We are currently still required by law to state the NEDC figures. In the case of new vehicles which have been type-approved according to the WLTP, the NEDC figures are derived from the WLTP data. It is possible to specify the WLTP figures voluntarily in addition until such time as this is required by law. In cases where the NEDC figures are specified as value ranges, these do not refer to a particular individual vehicle and do not constitute part of the sales offering. They are intended exclusively as a means of comparison between different vehicle types. Additional equipment and accessories (e.g. add-on parts, different tyre formats, etc.) may change the relevant vehicle parameters, such as weight, rolling resistance and aerodynamics, and, in conjunction with weather and traffic conditions and individual driving style, may affect fuel consumption, electrical power consumption, CO2 emissions and the performance figures for the vehicle.

Further information on official fuel consumption figures and the official specific CO2 emissions of new passenger cars can be found in the “Guide on the fuel economy, CO2 emissions and power consumption of new passenger car models”, which is available free of charge at all sales dealerships and from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, D-73760 Ostfildern, Germany and at www.dat.de.